The Budget: An Explainer

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For those of you bored or bemused by the federal budget, here's a word of encouragement. Everyone in Washington is bored, too  not because people here don't care about the expenditure of $2.6 trillion, but because most veterans of the political process understand that the early stages of political combat involve nothing more than cheesy political stagecraft. A president drafts a budget and sells it with blue-sky propaganda, while opponents mount their soap boxes and engage in old-fashioned hot-air chiliasm.

When members of Congress set about to spend your money (and waste considerable portions in the process), they begin by drafting a budget resolution. This has exactly as much binding authority as a New Year's resolution, and contains every bit as much sincerity. Within the next few weeks, members of Congress will draw up such a plan. It will set forth general goals for spending money, but deliberately will ignore at least $100 billion worth of outlays for combat operations in Afghanistan and Iraq, and for pork-barrel appropriations attached to the "invisible" spending bill, which is called an "emergency supplemental budget resolution."

Despite all the talk about "deep cuts" in the president's budget, such things are few and far between. Nearly 80 percent of the federal budget right now has been spoken for already. Medicare, Medicaid and Social Security gobble up more than half the free cash. Defense claims another large chunk, leaving Congress to tinker with the remaining 17 percent. After Congress has finished "deep cutting" the budget, expenditures will grow by at least 3.6 percent, and probably more than 5 percent. Only in Washington could someone spend an additional $125 billion a year and call it "deep cuts."

Economists have an explanation for this. They call it "rent seeking." Think of a politician's soul as an apartment. Think of lobbyists as renters. Each year, the renters show up, waving wads of cash. Politicians survey the throng. The winning contestants get to occupy the apartments on a one-year lease. It's a great deal for lobbyists: They spend millions and take home billions. It's not such a good deal for you or me, because we pay the billions and, if we use the goods and services promoted by the lobbyists, we pay the millions, too.

Worst of all, all this money changes hands for the purpose of maintaining a government that became obsolete decades ago. The Social Security system is a New Deal dinosaur. So are many of our regulatory agencies. Medicare and Medicaid bring us to the Mesozoic era of liberalism, but they also have run their course.

If you want to understand how little sense our system of government makes, walk down the cereal aisle at your local grocery store. Count how many brands you can buy. Then ask yourself: If I have this many options in cereal, why don't I have any options when it comes to really important stuff that every single American needs  health care and retirement security? Why must we deal with Ponzi-scheme remedies that clean out our wallets without giving us our money's worth?

Do we really believe our interests are best served by programs designed when Americans were driving Model A automobiles, where most washing machines had wringers, where refrigerators were scarce, interstates were nonexistent and air-conditioning a gewgaw reserved for futuristic exhibits at the World's Fair?

This year's budget fight promises to be more interesting than most because the president has proposed a couple of ideas that could unmask forever the idiocy of Big Government. He wants to privatize a small portion of Social Security and do the same with an eensy bit of the Medicare and Medicaid bring us to the Mesozoic era of liberalism, but they also have run their course.

If you want to understand how little sense our system of government makes, walk down the cereal aisle at your local grocery store. Count how many brands you can buy. Then ask yourself: If I have this many options in cereal, why don't I have any options when it comes to really important stuff that every single American needs  health care and retirement security? Why must we deal with Ponzi-scheme remedies that clean out our wallets without giving us our money's worth?

Do we really believe our interests are best served by programs designed when Americans were driving Model A automobiles, where most washing machines had wringers, where refrigerators were scarce, interstates were nonexistent and air-conditioning a gewgaw reserved for futuristic exhibits at the World's Fair?

This year's budget fight promises to be more interesting than most because the president has proposed a couple of ideas that could unmask forever the idiocy of Big Government. He wants to privatize a small portion of Social Security and do the same with an eensy bit of the Medicare program. He hopes people will discover that they get more bang for their bucks when they manage their money than they get when somebody else gets to spend it. This is especially true because there is no incentive for the spender to economize. The people using your cash don't know you. They don't feel guilty if they waste your money. In fact, they actually get in trouble if they fail to use the cash. This is why most federal agencies go on shopping sprees during the final days of the fiscal year. They know that if they don't spend every penny, someone will cut them back.

The president's opponents, many of whom call Uncle Sam the world's most prolific dispenser of compassion, know that a real look under the hood of government would be enough to persuade voters to abandon New Deal liberalism forever. This explains why "Dinocrats" are so sore at George W. Bush, and fighting him tooth and nail.

But more of that some other time. The moral for this week is simple: Don't take too seriously what you are reading and hearing right now about the budget. It's mostly for show. The real battles will come soon enough. When they do, remember the analogy of the cereal aisle and ask yourself: Why is society so good at providing choco-blaster puffs and so bad at providing government services that don't make me feel like an insignificant, dust-engorged little mite?

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